Failure to Launch in Fundraising

Jason Yeh
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May 9, 2023
Fundraising

Self-sabotageūüí•!

It's real. And honestly - it affects even the most well-educated and traditionally successful people out there. I catch myself doing it every once in a while because, you know what? Success can be scary.

Be careful about self-sabotage when it comes to fundraising. 

Self-sabotage in fundraising manifests itself in a failure to launch and after guiding hundreds of founders through the fundraising process, it's something I see all the time.

Where the sabotage starts in fundraising

I always emphasize that fundraising prep is crucial to a successful fundraise. Building relationships with investors, crafting a compelling narrative, and identifying the right investors for your company all require a great deal of time and thoughtfulness. It's not something that can be done overnight.

However, there's a fine line between preparing thoroughly and getting stuck in a cycle of perpetual preparation that leads to self-sabotage. The fear of failure can be paralyzing, and founders often become so obsessed with perfecting every nuance that they delay launching their fundraising efforts indefinitely.

Why is launching a fundraise so scary?

It's understandable why fundraising can be so frightening. Launching a fundraise forces a founder to confront the reality of either succeeding or failing. Both outcomes can be very taxing to handle. High achievers, in particular, are often afraid of failure of any kind. They have a pattern of being well-informed and ready for anything in order to achieve their successes. Fundraising failure, in particular, is scary because it can have existential impacts on a company. Inability to secure term sheets could ultimately mean shutting down.

On the other hand, success can also be scary.  Questions arise like:

  • Will you be able to use that money effectively?
  • Do you know how to run the company at the next stage?
  • If you take someone's money, will you be able to deliver a return for them?

These are all valid concerns that any founder would have.

The fears associated with fundraising often cause founders to subconsciously sabotage their efforts. This takes the form of rational feet-dragging. For example, a founder might say:

  • "Jason said I need to have 100 target investors. I only have 98 and it'll take me a few weeks to get those last 2"
  • "My story will be so much better when i make this incremental improvement in the product"
  • "I still haven't practiced my latest pitch / gotten enough feedback on the deck... I'll wait another few weeks before that's done"

With all these fears, it is easy for founders to subconsciously sabotage their fundraising efforts. They may rationalize the delay, thinking they need more time to get the perfect pitch or to identify the right investors.

Overcoming the fear of launching

So, what can a founder do to overcome the fear of launching and the tendency to  self-sabotage?

Here are some practical tips:

  1. Be aware of this tendency and acknowledge that it exists. Once you recognize that fear is holding you back, you can start to shift your mindset. Instead of focusing on the fear of failure or success, try to get excited by the challenge ahead. Recognize that no matter the outcome, the experience will be a valuable learning opportunity that will help you grow as a founder and leader.
  2. Set clear and achievable goals for your fundraising preparation. Break down your tasks into smaller, manageable steps, and set realistic deadlines for each step.
  3. Seek feedback from trusted peers, advisors, or mentors. They can provide valuable insights and help you refine your pitch or address any concerns you may have.
  4. Related to #3 - Surround yourself with a supportive network of fellow founders, mentors, and friends. They can encourage you, hold you accountable, and provide guidance when needed.
  5. Acknowledge your fears, but don't let them dictate your actions. Address them proactively, and devise strategies to overcome them.
  6. Practice your pitch in front of others and refine your storytelling, no matter how rough you think your first try will be. The more comfortable and confident you are with your pitch, the more likely you are to engage potential investors and overcome your fears.
  7. Keep track of your progress and celebrate small wins along the way. This will help you maintain momentum and stay motivated throughout the fundraising process.
  8. Lastly, remember that setbacks and challenges are part of the journey. Learn from them, adapt, and keep pushing forward.

It is important to be aware of the tendency to self-sabotage and turn your fear of fundraising into faith in your process. Get excited about the challenge and the potential for growth, no matter what the outcome. The key is to strike a balance between preparation and action. Don't let fear hold you back from launching. The outcome is growth no matter which way things go.

Good luck!

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